Schwarzenegger Vetoes Health Care Bill Aimed at Big Employers

September 14, 2006 ( - California Governor Arnold Schwarzenegger vetoed a bill Wednesday that would have forced large employers to spend at least 8% of employee payroll on health benefits or funnel the difference into a fund to provide coverage for the state's uninsured.

Schwarzenegger’s veto of the bill, that had been aimed at employers with at least 10,000 employees, claimed the measure would do nothing to lower costs or expand coverage, according to Business Insurance.

Of the bill aimed at employers, the governor said: “Singling out large employers and requiring them to spend an arbitrary amount on health care does nothing to lower costs or guarantee that even one more person has health care coverage,” he said, Business Insurance reported.

The Governor turned away another bill last week that would have made the state the primary provider of health care to California’s uninsured residents (See  Schwarzenegger Turns Away Universal Health Proposal ). He called the legislation “a serious and expensive mistake,” and further added that the “program would cost the state billions and lead to significant new taxes on individuals and businesses, without solving the critical issue of affordability.”

However, efforts to get employers to pay more toward health care for their employees were met with success in Massachusetts, despite the objection of Governor Mitt Romney (See Romney Vetoes Per-Employee Health Coverage Charge ). The regulation calls for employers with 11 or more employees who do not insure 25% of their workforce to pay at least one-third the cost of individual premiums, or else pay a $295 per employee fee each year (See MA Employers Required to Cover Health Care ).